Define what a property market "crash" is competiti

Go on, define it. Winner gets two 40 year mortgages :smiley:

I want a universal definition that NOBODY can shy away from.

20% Down from peak, Nominal Prices.

The only rider is that inflation must be positive. i.e. 0%+ and average income growth must be within 3% points of inflation, either way +/-.

A crash refers to Sudden, violent or dramatic events.
e.g. The cars crashed in a headon collision, the Nikkei index dropped by 50% in the last two days

When house prices fall they do so over several years, they do not drop by 50% from one day to the next, but prices are said to be sticky on the way down, and they ofter fall maybe 10% per annum over a period of 3 to 5 years.

So the price movement cannot be said to be sudden, violent or dramatic with regard to house prices so there can be no crash, just a reversion to the mean.

something greater than a drop of 10% in real GDP over two quarters is technically a ‘depression’ (i should have double checked this before posting!)
so its possible that if the 13% of our GDP that is property related gets hit and exports to the USA are hurt due to a weak dollar that we may be headed
for more than a standard recession, however, i don’t feel this is likely, in fact i’m wondering why i’m posting this at all.

Jaysus, that sounds like an unlikely scenario anywhere, short of war or economic collapse.

I was under the impression that a depression was just a long recession - eeck too many ‘essions’ in that sentence.

It’s when your place of residence ceases to be an investment and reverts to it’s default state.
A home, just somewhere to crash.

Defining “Crash” is like defining “Old”. You’re perspective of Old changes depending on how old you are. You’re perspective of Crash changes depending on how exposed you are.

You’ll never get everyone to agree. Property could fall by 90% over 20 years and people would say it wasn’t a crash because it didn’t happen fast enough.

Judging by the absolute certanty that people had about prices always rising, I think it’s fair to say that confidence in Irish property has crashed.

-Rd

A crash is when a people realise they paid significantly more for something worth significanlty less, the outcome of which has a significant impact on their lives financially and or emotionally on learning they have been duped in the process.

A crash is when people get hurt by not paying attention or by getting distracted and by going faster than they could handle.

In one sense Ireland is different in that we have a GDP/GNP gap that is completely different to anywhere else in the world. The gap is, IIRC, around 19%. And I’d hazard a guess that about 13% of that 19% is purely down to the transfer-pricing scam. Now, if the US tax authorities follow through with threats to clamp down on that, then a full 13% of Irish GDP could go up in smoke overnight, without any real immediate impact on the wider economy.

Unless of course the end of the transfer-pricing scam then leads US multinationals to conclude that there’s no point in them remaining in Ireland any longer than they have to, and they start pulling out en masse :open_mouth:

Then there’s the elephant in the room of all the bubble-froth blatant gouging and rampant profiteering going on everywhere. As the recession bites, people will become more cautious with their cash, and will no longer be willing to pay stupidly over-the-odds prices for basic services. A lot of unjustifiable profit-margins are about to get seriously squeezed.

Add the construction/property collapse, indiginous manufacturing going to the wall, services and retail in contraction, well you can see why I’m increasingly convinced that the next 3 years will see a 10% contraction in GNP if we’re lucky, and possibly up to 25% shaved off GDP.

Enough with the sugar-coating, if you’re feeling pessimistic just spit it out. :smiley:

financial-dictionary.thefreedictionary.com/crash

Blue Horseshoe

A crash technically is when the momentum of a situtation goes to zero very rapidly.
Prices of houses cannot crash by definition, but the market in houses can crash as numbers of houses sold per month plunges from value X to a very low percentage of X.
Metaphorically speaking, the market has now lost its momentum and is entering the airbag phase.

That does it for me.
Perfectly good criteria to describe a crash in all relative circumstances.

My only worry is I dont think the National Air Bag Development Plan even got to cabinet level! :open_mouth:

ROFL :laughing:

That’s cause it was replaced by the National Brown Bag Development Plan which never made it out of the planning stage

soc said

Thats because they could’nt get it past the National Gas Bags who talked it (up) to death. :laughing: